For personal use only November 2019 • Investor Presentation • ASX : GMC
Investor Information For personal use only This presentation has been prepared by Gulf Manganese Corporation Limited (“Gulf”) for the exclusive use of the party to whom Gulf delivers it to. The presentation should not be regarded as a substitute for the exercise of their own judgement. The valuations, forecasts, estimates, opinions and projections contained herein involve subjective judgment and analysis. Any opinions expressed in the material may be subject to change. The presentation contains forward looking statements and any estimates or projections are based upon the best judgement of Gulf and on currently available information. All currency referred to in this presentation is based on USD, unless otherwise stated. The presentation has been prepared solely for informational purposes and should not be construed as an offer to buy or sell securities. The Recipient should not construe the contents of the matters presented as providing legal, tax, accounting or investment advice or recommendation. The Recipient should consult their own counsel, tax and financial advisors as to any matters related to the presentation. The presentation does not purport to be all inclusive or to contain all of the information that the Recipient may require to evaluate Gulf. No investment, divestment or other financial decisions or actions should be based solely on the information in this presentation. The presentation has been prepared on a confidential basis for the use and benefit of the Recipient. Distribution to any other person other than the Recipient is not authorised and material should not be copied, reproduced, distributed or passed to others without the prior consent of Gulf. Thank you. 2
Corporate Snapshot Share ASX Ticker GMC GMC Share Price Performance For personal use only Metrics Issued Shares 5,184,364,998 Share Price 0.6¢ (as at 18 November 52 Week 0.10¢ / 0.5¢ 2019) High/Low Market Cap $ A 31 million Board & Management GMC Shareholder Structure Non-Exec Chairman Craig Munro Top 20 Shareholders 46.71% Board & Management 5.22% Managing Director & Hamish Bohannan CEO 11.76% Citicorp HSBC 7.46% Non-Exec Director Andrew Wilson PT JTS Group 3.50% Non-Exec Director Tan Hwa Poh Tan Hwa Poh 2.93% Company Secretary Ian Gregory BNP Paribas 2.78% CFO Robert Ierace 3
Who is Gulf Manganese Corporation? For personal use only Gulf is a smelting specialist , involved in mining, smelting and • trading of manganese products, offering exposure to the niche top end manganese space, essential to steel and batteries Gulf is the only ASX listed company • offering exposure to the unique Indonesian high grade ore Gulf is developing a premium • refined ferromanganese alloy production smelting hub in West Timor, Indonesia Headquartered in Australia, with • offices in Perth, Kupang, Singapore and Dili 4
Investment Opportunity Construction on track to • Construction over 60% complete with commissioning and first commercial For personal use only be completed in H2 2019: alloy sales expected during Q1 2020 • Low-cost, highly scalable production starting at 43,000 1 tpa, increasing to Clear pathway to over 200,000 2 tpa of ferromanganese alloy with the addition of subsequent production ramp-up: smelters • Manganese Concentrate Export Permit (“DSO”) approval received to export DSO Licence secured: up to 103,162 tonnes of high-grade manganese concentrate per year, with the licence secured through to January 2022 Mine-gate to production • Actively assessing acquisition opportunities targeting high grade (+49%Mn) acquisition strategy: manganese mines in Indonesia Diversified revenue • Export of refined ferromanganese alloys of Medium and Low Carbon, and streams: export of Direct Shipping Ore (DSO) Strong in-country • Strong Indonesian partnership with PT JTS, whose Chairman and CEO is partnerships: Bapak Fofo Sariaatmadja, a highly regarded Indonesian business executive Strategic interest in Timor- • Planned acquisition of a 20% interest in Iron Fortune Pty Ltd provides a first to Leste manganese market exploration opportunity in Timor-Leste, significantly diversifying and explorer: de-risking supply chain 5 Notes: 1 2 Units 2 8 Units
What is Manganese? For personal use only Manganese is: The fourth most consumed metal behind • iron, aluminium and copper A brittle, hard, silver-grey metal that looks • like iron Metallurgical: Over 90% of demand comes from • steelmaking. No suitable substitute for the metal exists, it cannot be recycled. Manganese is usually added in the form • of ferroalloys: ferromanganese (FeMn) and silicomanganese (SiMn) Manganese ferroalloys are added to • deoxidise molten steel, remove sulphur and act as hardening agent It is also used in batteries, chemicals and • the aluminium industry 6
Low Carbon FeMn – Highest Value Alloy For personal use only Gulf’s Low Carbon Alloy: Niche, high value segment • Special product – Ultra Low • Manganese Ore Carbon combined with very high manganese content Process maximises margins • Highly profitable • Manganese Alloy High Carbon Ferromanganese Refined Silicomanganese Alloy Alloy Ferromanganese SiMn HCFeMn Alloy Construction Steels Flat Steels Medium Carbon Low Carbon Ferromanganese Ferromanganese Alloy Alloy MCFeMn LCFeMn Specialty Steels and High Alloy Steels 7
LC FeMn Project Value Proposition For personal use only 3,000 2,500 2,000 US$ / Metric Tonne Value upgrade in LC FE Mn Alloy 1,500 1,000 500 0 Jul 14 Jan 15 Jul 15 Jan 16 Jul 16 Jan 17 Jul 17 Jan 18 Jul 18 Jan 19 Mn flake FOB CHINA LC FeMn EX Works USA MC FeMn Ex Works USA SiMn CIF Japan HC FeMn 75 Ex works USA Mn Ore 44 Mn Ore 37 8
Why Indonesia? For personal use only Super high-grade ore >49% manganese (Mn) • Very low iron (Fe) content • Extraordinary Mn:Fe ratio, typically greater than • 50:1 Indonesia law does not allow for exporting of • ‘untreated ore’ without a Direct Shipping Ore licence (DSO) 1 Gulf provides a route to market to local miners and • realises additional value through the smelting process DSO now secured and Gulf can also export • manganese concentrate 1 The government is currently only allowing DSO until April 2022 after which the ban may be reinstated 9
Key Value Drivers for Manganese Ore For personal use only Manganese Ore Competitor Analysis 51.00 Better Quality Indonesia 41.00 31.00 Mn : Fe Ratio Ghana 21.00 Lower Quality Australia Australia 11.00 Australia Australia Brazil South Africa Australia Gabon South Africa South Africa 1.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 Total Impurities of Fe, Al 2 O 3 and P Lower Quality Better Quality 10
Project Overview – Smelting Hub For personal use only Development of Smelting Hub in West Timor Initially 2 x 7MVA smelters treating 110,000 tonnes of ore, producing up to 43,000 tonnes FeMn alloy per annum Flexibility allowed by batching; mitigates market risk Production of Low Carbon FeMn using FeSi Production of Medium Carbon FeMn using natural hedge coke Low Carbon FeMn Alloy - A Unique process Produce Ultra Low Carbon, High Mn FeMn alloy Maximising metallurgical value adding Expansion Plan Initial expansion to 4 smelters within 3 years 11
Project Overview – Unique One Step Process For personal use only Gulf’s Smelting Process Silicothermic High Mn/Ultra process – Indonesian using Ferro Low Carbon Mn Ore Silicon as a Alloy reductant Typical Smelting Process Smelting Intermediate using High Mn Mn Alloy Mn ore Metallurgical Converter Low Carbon containing coke as Alloy high carbon reductant Indonesian high grade and very high Mn:Fe ratio ore enables Gulf to use a SINGLE STEP process to produce very high- grade alloy, whereas Gulf’s competitors use 2 step process (converter) thus using less power per Mt of final product and increased production efficiencies. 12
Project Overview – Advantages For personal use only First mover advantage ✓ Permits in place ✓ Power agreements secured ✓ 30 year land lease secured on industrial estate ✓ Port facilities close by ✓ Direct Shipped Ore licence obtained ✓ ✓ Smelters and transformers fully refurbished and on site Steelwork 60% complete ✓ Ore supply MOUs in place ✓ Strong in-country Indonesian partner (PT JTS) ✓ 13
Project Overview – Kupang Infrastructure For personal use only 1 4
Project Overview – Process For personal use only 15
Project Overview – Ore Supply For personal use only NTT focussed procurement strategy • with 20 MOU agreements in place with NTT miners. Gulf committed to purchase • manganese ore only from suppliers who demonstrate they have all required permits, licences, certificates and approvals as required by Government regulations (clean and clear). Strategic interest in Timor-Leste • manganese explorer (Iron Fortune). Mineralisation expected to continue into Timor-Leste. Discussions with international • manganese ore suppliers. 1 6
Project Overview – Ore Supply For personal use only 17
Alloy Operating Margin (Per Tonne Sold) 2,000 For personal use only 1,800 Ore Sales Price Purchase Alloy Price & Low Carbon 1,600 Preparation 1,400 USD per tonne sold FeSi75% 1,200 1,000 Power Burnt Lime 800 Other Smelting costs 600 Overheads 400 OPERATING MARGIN 200 0 18
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